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>The solution is to build houses, but what kind of investor is going to throw their money at Berlin, where their opportunity to make a return on their investmen

>The solution is to build houses, but what kind of investor is going to throw their money at Berlin, where their opportunity to make a return on their investment is severely hampered? Uh, the state. It's strange to me that someone can honestly ask this question. The free market has failed as is its wont in these matters, this failure always needs to be addressed by the state. Where were you for the last global economic collapse?

ericd 7y ago
What does the last global debt crisis (which was caused by central banks around the world keeping interest rates incredibly low for a long time, which allowed housing debt/speculation to balloon massively, and then tightening suddenly) have to do with the failures of the free market to develop sufficient housing? And in many major cities, things like zoning are preventing developers from building nearly as much housing as they’d like. I guess I’m just kind of baffled as to how you’ve reached the conclusions you have. I’d love some clarification.
CryptoPunk 7y ago
The last global financial crisis was created by the world's largest Central Bank. It had absolutely nothing to do with the free market when the largest banks were dealing with government-guaranteed securities and were speculating on a government created bubble. In a free market, all those who poured billions into the bubble would have gone bankrupt and all of their real assets would have been sold off in bankruptcy proceedings to responsible players who are less likely to over leverage themselves and exacerbate the speculatory frenzy in the next bubble. The only reason the market hasn't solved the housing problem is government interventions like rent control. In places without these interventions and with strong enforcement of private property and contract rights, the market does an absolutely excellent job of providing housing. The effects of rent control have been observed for a hundred years. In city after city rent control has been observed to cause more harm than good for the population at large.
- someguydave 7y ago
  https://www.idiosyncraticwhisk.com/2016/10/housing-part-183-measure-of-shortage.html https://www.idiosyncraticwhisk.com/2016/10/housing-part-183-... Kevin Erdmann agrees with you. Here is his blog post about the housing shortage associated with the 2008 bust
DocTomoe 7y ago
> Uh, the state. This is Berlin, which actually used the slogan "arm aber sexy" (roughly: impovershed, but sexy). They don´t have the cash to start building flats with no ROI.

ericd 7y ago

What does the last global debt crisis (which was caused by central banks around the world keeping interest rates incredibly low for a long time, which allowed housing debt/speculation to balloon massively, and then tightening suddenly) have to do with the failures of the free market to develop sufficient housing? And in many major cities, things like zoning are preventing developers from building nearly as much housing as they’d like. I guess I’m just kind of baffled as to how you’ve reached the conclusions you have. I’d love some clarification.

CryptoPunk 7y ago

The last global financial crisis was created by the world's largest Central Bank. It had absolutely nothing to do with the free market when the largest banks were dealing with government-guaranteed securities and were speculating on a government created bubble. In a free market, all those who poured billions into the bubble would have gone bankrupt and all of their real assets would have been sold off in bankruptcy proceedings to responsible players who are less likely to over leverage themselves and exacerbate the speculatory frenzy in the next bubble. The only reason the market hasn't solved the housing problem is government interventions like rent control. In places without these interventions and with strong enforcement of private property and contract rights, the market does an absolutely excellent job of providing housing. The effects of rent control have been observed for a hundred years. In city after city rent control has been observed to cause more harm than good for the population at large.

someguydave 7y ago
https://www.idiosyncraticwhisk.com/2016/10/housing-part-183-measure-of-shortage.html https://www.idiosyncraticwhisk.com/2016/10/housing-part-183-... Kevin Erdmann agrees with you. Here is his blog post about the housing shortage associated with the 2008 bust

DocTomoe 7y ago

> Uh, the state. This is Berlin, which actually used the slogan "arm aber sexy" (roughly: impovershed, but sexy). They don´t have the cash to start building flats with no ROI.